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This study aims to focus on the impact of COVID-19 on the Spanish wine sector and the financial resilience of Spanish wineries in the period 2019–2020.

The data set contains 355 limited companies of the Spanish wine sector which were active in the period 2019–2020. The explanatory variables used are size and age of the company, exports, subsidies and gender distribution in the workforce. The financial statements of the companies are treated as compositional data, using log-ratios for asset structure, leverage, margin, turnover and debt maturity. The first-difference estimator is used for the panel-data model relating the differences in the log-ratios between 2020 and 2019 to the explanatory variables.

In average terms, margin and turnover have significantly worsened between 2019 and 2020, while debt maturity has increased. A larger firm size, a greater age, a higher share of women in the workforce and subsidies have made wineries more resilient between 2019 and 2020.

To the best of the authors’ knowledge, this is the first financial statement analysis of the impact of COVID-19 in the winery sector.

Successful innovation requires a significant financial commitment. Therefore, the purpose of this paper is to investigate the relation between internal and external financing and the degree of innovation in European firms.

An empirical investigation is carried out using a longitudinal data set including 146 large, quoted, European firms over ten years, resulting in 1,460 firm years.

The authors find that only firms in the energy sector will be more innovative when they are profitable. For the sectors of basic materials, manufacture and construction, services, financial and property services, and technology and telecommunications, profitability is negatively related to innovation. External financing in the form of debt reduces the focus on innovation in profitable firms.

The authors analyze the findings through the lens of evolutionary economics. The model is not valid for firms in the consumer-goods sector, which indicates a need for adapting the model to each sector. We conclude that the impact of profitability on innovation varies across sectors, with debt financing as a moderating factor.

To the best of authors’ knowledge, this is the first study that analyzes the internal and external financing and the degree of innovation in European firms on a longitudinal basis.